As the authors note, the procurement of goods, works and services is particularly vulnerable to corruption. According to OECD estimates, approximately $2 trillion of global public procurement expenditure is lost to corruption. Each phase of the procurement cycle is characterized by distinct corruption risks. At the pre-tender and planning stage, these include needs manipulation, inflated or artificially generated demand used to justify procurement, and biased or tailor-made technical specifications designed to favour a particular supplier. During the tendering and bidding phase, risks include bid rigging, collusion, fake competition, wrongful disqualification of compliant bidders and the manipulation of submission deadlines or access to tender documentation. At the contract award and implementation stage, risks may involve contract steering in favour of a “loyal” bidder that does not meet evaluation criteria, overpricing and false invoicing, substandard delivery of goods, works and services, payments for undelivered outputs and other misconduct.
Since most goods, services and works are procured from the private sector, promoting Since most goods, services and works are procured from the private sector, promoting business integrity represents an effective way of preventing and countering corruption in public procurement. While sanctions against non-compliant companies remain an obvious deterrent, the report emphasizes that incentive-based mechanisms can be equally important in motivating ethical business conduct.
In particular, the paper highlights the following measures:
- Exemptions from prosecution and penalty mitigation. For example, Brazil’s Clean Company Act provides for leniency agreements, allowing companies to benefit from reduced fines or non-trial resolutions in exchange for voluntary disclosure, cooperation with investigations and the strengthening of anti-corruption ethics and compliance programmes. In France, a comparable function is performed by the Public Interest Judicial Agreement (CJIP): companies may avoid prosecution by paying a fine, compensating damages and implementing a monitored compliance programme under the supervision of the French Anti-Corruption Agency.
- Preferential procurement treatment. The World Bank Group integrates anti-corruption requirements at the pre-qualification stage. Entities implicated in fraudulent or collusive practices may be excluded from projects, while compliant companies gain access to procurement opportunities financed by the institution.
- Performance-based contracting. This model incentivizes integrity during the contract execution phase. Procuring entities may include performance-based incentives such as bonuses for adherence to ethical standards, the implementation of project-specific anti-corruption measures and transparent governance practices. Conversely, misconduct may trigger financial penalties or less favourable contract renewal conditions.
- Reward and recognition programmes and integrity certifications. These represent one of the most widespread forms of non-financial incentives. In Italy, the Legality Rating administered by the Competition Authority awards companies between one and three stars depending on the maturity of their compliance framework. Holding such a rating can provide additional scoring in bid evaluations, improved access to financing and reduced bid bond requirements. In Argentina, the RITE registry operates as a voluntary self-assessment platform for anti-corruption programmes, granting registered companies reputational benefits and preferential evaluation in certain public contracts. Similar initiatives exist elsewhere, including ThaiCAC certification in Thailand, corporate social responsibility integrity labels in Morocco and the Business Integrity Registry in Mexico.
- Integrity Pacts. Integrity pacts are formal agreements between contracting authorities and bidders committing all parties to transparency and the avoidance of corrupt practices, often under independent civil society monitoring. Within the European Union, such pacts have been applied to infrastructure projects financed through EU funds, where civic oversight enhanced transparency, competition and trust. In Colombia, a collective integrity pact was introduced in the energy sector to mitigate corruption risks in electrification projects in remote regions.
At the same time, as emphasized in the document, incentive mechanisms do not replace sanctions but complement them. If sanctions establish the “red lines” of acceptable conduct, incentives create positive motivation for businesses to invest in compliance, transparency and anti-corruption procedures.
Moreover, UNODC experts emphasize that incentives are effective only within a coherent institutional framework built on three interdependent pillars:
1) Clear integrity standards. When developing integrity standards, Governments should move beyond the mere formal existence of anti-corruption policies and align requirements with international anti-corruption frameworks (including ISO standards). Core elements highlighted in the report include:
- Formalized anti-corruption policies and codes of ethics;
- Demonstrable leadership commitment (“tone from the top”);
- Regular corruption risk assessments;
- Internal control and audit mechanisms;
- Third-party due diligence procedures;
- Beneficial ownership transparency;
- Training and awareness-raising systems;
- Secure whistle-blowing channels;
- Incident response and internal investigation procedures;
- Disciplinary measures for misconduct;
- Monitoring and periodic evaluation of compliance effectiveness.
The paper also underscores the value of sector-specific integrity standards, noting that universal frameworks do not always capture industry-specific corruption risks. Sectoral integrity frameworks and collaboration with professional associations are identified as promising approaches.
2) Assessment of anti-corruption ethics and compliance programmes. The assessment of compliance programmes is presented as a central tool enabling authorities to make evidence-based decisions on granting incentives. Assessment frameworks should be risk-based and tailored to the procurement context, sector and company profile. Differentiated methodologies may combine corporate self-assessments with in-depth reviews conducted by public authorities or independent assessors. Evaluations should cover both quantitative and qualitative indicators and examine not only the existence of procedures but their operational effectiveness. Relevant assessment dimensions may include: leadership commitment and ethical culture; corruption risk management systems; training and communication; internal controls and audit independence; effectiveness of reporting channels; incident response practices; participation in collective action initiatives.
3) The incentive system itself.
